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Go Home John Edwards: The Jerk, the Felony, and the Trouble With...

POLITICS JUNE 18, 2011

John Edwards: The Jerk, the Felony, and the Trouble With Transparency

“Being a jerk is not a felony”—this was the consensus among pundits within days of John Edwards’s indictment for violating campaign finance laws by inducing two political donors to pay the living expenses of his mistress, Rielle Hunter, and their child, while a former campaign aide posed as the child’s father.

It’s still hard to absorb the magnitude of Edwards’s moral offense, and “jerk” hardly does it justice, but let’s assume that Ruth Marcus of The Washington Post, quoted above, and election law professor Rick Hasen are right that funneling money to a presidential candidate to cover up his extramarital affair and secret child is not a campaign contribution, as the prosecutors contend, but a personal one. It’s less like a campaign ad, and more like the haircuts that Edwards’s centenarian donor Rachel “Bunny” Mellon originally offered to pay for. Ari Melber of The Nation identified one decisive point in favor of that argument: It would be illegal for Edwards to have used campaign funds for such purposes, so it’s implausible for prosecutors to define them now as campaign spending. But what, then, does the Edwards indictment represent?

Marcus and her Post colleagues worry that the Edwards case is an example of the “criminalization of politics,” which they see as a pervasive problem running through the prosecutions of Lewis “Scooter” Libby, Tom DeLay, and various other figures of both parties. “Criminalization of politics,” though, implies that hardball political tactics and fights, like DeLay’s partisan redistricting, have been transferred to the venue of the criminal justice system. Edwards’s deceptions, however, are hardly routine politics, nor are they extreme versions of ordinary tough-guy politics, and, at any rate, his days as an actual political player are long past. Instead, what the Edwards indictment reveals, by its weakness, is just how routine it has become to move money in large and potentially corrupting amounts in support of politicians outside of the normal, regulated campaign finance system. Bunny Mellon’s and Fred Baron’s payments to secure John Edwards’s secret may not have crossed the letter of the campaign finance law, but they surely held the potential for corruption, in that Edwards’s obligations to them—had he kept his secret and won the power of the presidency—would have been beyond measure.

The non-campaign contributions at issue in the Edwards case are but a tiny slice of the unseen money that sluices through our politics these days. There was, for example, Edwards’s own period of employment, if that’s the right word, as a senior adviser to Fortress Investment Group, a hedge fund. While we know to the decimal point how much Fortress’s employees donated to his campaign ($167,460), and exactly who gave it, we have no way of knowing whether the $7.5 million he reported  in Fortress fund assets was compensation for his advice, or whether he even gave them any advice. The same is true of several other political figures who took the EZ-Pass lane through hedge funds and came away millionaires, including Rahm Emanuel, Al Gore, and Larry Summers.

And there are countless other ways that money from wealthy people with interests before government now reaches politicians. There are the 501(c)4 tax-exempt organizations, such as Karl Rove’s American Crossroads and several Democratic counterparts launched more recently, which offer the perfect combination of unlimited giving and anonymity. While these organizations aren’t allowed to be used primarily for electoral activity, that rule seems to have gone out the window for lack of enforcement. And then, as The New York Times reported last fall, there are an unknown number 501(c)3 charities organized by members of Congress around pet causes that often do very little charity and mostly serve to host fundraisers or conveniently keep the member’s campaign staffers on payroll during non-election years. Contributions to these organizations are even tax-deductible.

Most of these cash scams and subterfuges are within the letter of the law (even before Citizens United, though that decision seems to have unleashed a sense of “anything goes”), so Marcus and her high-minded editorial board colleagues have little to fear regarding the “criminalization of politics.” But what’s the alternative to legal regulation and potential action by the Federal Election Commission (which its own members admit is paralyzed)? The reflexive answer is “transparency”—if we know who’s giving what, and who the donors are, empowered citizens can hold politicians accountable.

Transparency has made huge leaps in recent years. Just last week, for example, the Sunlight Foundation released a brilliant new tool: the Inbox Influence Explorer. Add it as an extension to your Gmail account, and, whenever you get new mail, it will show you instantly, in a sidebar, all the political contributions from the sender. 

It’s certainly interesting, and I’ll admit to being intrigued to find out, for example, that certain libertarian college friends of mine became Obama donors in 2008. But what public interest is really served by this information? Or by the maps now available on The Huffington Post that let you figure out who your neighbors contributed to? Again, I’m endlessly curious, or nosy, especially as I live in a neighborhood with lots of journalists, lobbyists, and political consultants, and it’s always fascinating to know what they’re up to, or to find out the political orientation of my daughter’s friends’ families. It’s not private information, but it’s also not helping me figure out who to vote for or who has influence over my (non-voting) member of Congress.

And here’s where these new tools of transparency come back to Edwards. We’re able to find out a lot, a whole lot, about things that don’t matter—like where our neighbors’ political affiliations lie. But, except in rare, extreme cases like Edwards's, when a prosecutor gets involved, we don’t know much at all about the much, much bigger ways in which money holds sway over politicians.

That’s not a criticism of the transparency movement, which does what it can with what it’s got. Nor is it an endorsement of the Edwards prosecution—let a jury decide. But it is to say, let’s focus on getting the information we can really use, about all the channels by which economic inequality is reinforcing political inequality, rather than being satisfied with trivia. Edwards may be just a jerk, or worse. But, rather than dismissing the case entirely, it should remind us of how much we don’t know, but should, about how money influences and corrupts politicians.

Mark Schmitt is a senior fellow at the Roosevelt Institute and former editor of The American Prospect.

Follow @tnr on Twitter.

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This article is a bit scattered to me, although maybe that was forewarned by its headline. Nevertheless, at the end of the third paragraph is the inference that hush money donations are different than other donations in the form of their influence and I don't know why that should be the case, inasmuch as all the money transferred is spent for the benefit of the legislator. Under all circumstances payments to people who make laws are wrong and we do it as if it wasn't bribery for reasons I have never understood, even if you know who is doing the bribing. Maybe legislating is just another capitalist endeavor sold to the highest bidder.

- Nusholtz

June 18, 2011 at 3:12am

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This article makes a remarkably important point, and one which gets overlooked in a lot of the campaign finance literature: the almost-absolute right of anyone to employ and pay anyone anything for any legal purpose if the person so paid is an employee or an independent contractor. If a present or potential politician or his friends or family can be hired at any salary, and this is not to be considered a contribution, huge amounts of money can be funnelled without any regulation or oversight. And I don't know how it is possible to stop this sort of thing, except around the edges (like preventing office holders from working in certain industries for a period of time).

- JohnEMack

June 18, 2011 at 10:04am

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The author writes: "It’s still hard to absorb the magnitude of Edwards’ moral offense, and “jerk” hardly does it justice, but let’s assume that Ruth Marcus of the Washington Post, quoted above, and election law professor Rick Hasen are right that funneling money to a presidential candidate to cover up his extramarital affair and secret child is not a campaign contribution, as the prosecutors contend, but a personal one." The issue here is not just personal. The IRS cannot have large sums of money being funneled all over the place to intermediaries. Especially if the intent is to deceive or obfuscate. Yes, gifts are legal, but the paper trail must be clear for taxation purposes. A gift tax has an exemption of $10,000. After that, you are to treat it as earned income. The amounts here are FAR in excess of that threshold. So, Edwards really has one of two choices: Treat the money as a gift, OR treat the money as a campaign contribution. Both have substantial paper work requirements. Either way, this is sleazy as hell. He (or Ms. Hunter) could have readily treated all this as gifts and paid taxes on it without disclosing anything to anyone except the IRS. But they didn't. It's always funny when dems are faced with critiquing the wrongs of one of their own. Never do they just say "Yes, this was wrong and he should be punished." Instead, we always get the micro-parsing of the law and a pathetic explanation of why it wasn't really that bad. Hold them to higher standards.

- seattleeng

June 19, 2011 at 1:27am

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For once I'm agreeing with seattleeng. If the cash wasn't a campaign contribution, fine. But then it was a taxable gift. Did Edwards or his girlfriend pay tax on that money? I doubt it.

- AaronW

June 19, 2011 at 9:33am

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AaronW, typically, the donor pays tax on the gift.

- Nusholtz

June 19, 2011 at 1:20pm

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Do you mean the gift giver files the return and writes the check to the IRS? I didn't think so. If my rich auntie gives me a million dollars and I have to pay $500K or whatever to Uncle Sam, that $500K can come from noplace other than my aunt's kitty, but I still thought that I, not she, would be the one to declare a million dollars in gift income and pay the requisite tax out of my newly flush account.

- AaronW

June 19, 2011 at 5:44pm

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From Basman on Gift Tax In America (aka Wiki): ....A gift tax is a tax imposed on the gratuitous transfer of ownership of property. When a taxable gift in the form of cash, stocks, real estate, or other tangible or intangible property is made the tax is usually imposed on the donor (the giver) unless there is a retention of an interest which delays completion of the gift. A transfer is completely gratuitous where the donor receives nothing of value in exchange for the gifted property. A transfer is gratuitous in part where the donor receives some value but the value of the property received by the donor is substantially less than the value of the property given by the donor. In this case, the amount of the gift is the difference. In the United States, the gift tax is governed by Chapter 12, Subtitle B of the Internal Revenue Code. The tax is imposed by section 2501 of the Code...

- basman

June 19, 2011 at 11:32pm

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seattleeng: "Never do they just say 'Yes, this was wrong and he should be punished.'" Never? Surely that's wrong on the facts. Some called for Weiner to be punished. Some called for Rangel to be punished. Now, if only Republicans in Congress had called for Vitter to be punished. I don't recall a clamor by his own party demanding that he step down. Or Ensign. The tendency of party members to protect their own is hardly the property of any one party. A simple review of even recent examples would show it quite obviously.

- dsimon

June 25, 2011 at 1:23am

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